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Income Tax Appellate Tribunal, ABENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of ld. CIT (Exemptions), Bangalore dated 25.2.2025 vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/1073667427(1) rejecting the approval granted u/s 80G of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised the following grounds of appeal:
3. The assessee has also filed an application for admission of additional evidences under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 which are reproduced below for ease of reference and convenience:
4. Before us, the ld. A.R. of the assessee submitted that during the course of proceedings before the ld. CIT(E), the assessee could not represent its case properly as only one opportunity of being heard was provided on 30/11/2024. Further, before passing the order rejecting the approval u/s 80G(5) of the Act, the ld. CIT(E) did not even issued show cause notice to substantiate its claim. The assessee even could not produce the documents before the ld. Acharya Sri Tulsi Mahapragya Seva Kendra Charitable Trust, Bangalore Page 10 of 16 CIT(E) for the aforesaid reason. In view of this, the ld. AR submitted that the Tribunal being the ultimate fact-finding authority, it is a fit case to allow the application of the assessee and the additional evidences may be admitted for adjudication. Further, ld. A.R. stated that the documents filed along with the accompanying application are essential for adjudication of the issues in the present appeal. He submitted that if the assessee is not allowed to produce the documents specified in the accompanying application as additional evidence, it will put to irreparable loss and injury. On the other hand, no loss or hardship will be caused to the respondent if this application is allowed. The ld. A.R. of the assessee therefore, most respectfully prayed that this Tribunal may be pleased to allow the accompanying application and allow the assessee to produce the document specified in the accompanying application as additional evidence on its behalf in the interest of justice and equity.
The ld. D.R. on the other hand strongly opposed the admission of additional evidence at this stage.
We have heard the rival submissions and perused the materials available on record on the admission of additional evidence. Accordingly to the Rule 29 of the I.T. Rules, 1963 generally the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal but if the Tribunal requires any document to be produced to enable it to pass orders or for any other substantial cause or if the income tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal for reasons to be recorded, may allow such document to be produced or may Acharya Sri Tulsi Mahapragya Seva Kendra Charitable Trust, Bangalore Page 11 of 16 allow such evidence to be adduced. In the present case, it is undisputed fact that assessee could neither represent its case properly before the ld. CIT(E) nor ld. CIT(E) served show cause notice before rejecting the approval u/s 80G(5) of the Act. The ld. CIT(E) rejected the application dated 13/08/2024 without considering the evidences produced before us .This being so, we find good and sufficient reason in not submitting this additional evidence before the lower Authority. Accordingly, we admit these additional evidences as these are essential for adjudication of the issues in the present appeal.
Now brief facts of the case are that assessee is a Trust registered on 17.8.2000 under the name and style of MBA Natha Charitable Trust. Subsequently, the Trust deed dated 17.8.2000 was amended on 8.6.2009 for the change of Trust’s name i.e. Acharya Sri Tulsi Mahapragya Seva Kendra Charitable Trust. The assessee trust has been granted registration u/s 12AB of the Act under sub-clause (i) of clause (ac) of sub-section (1) of section 12A of the Act on 17.3.2022 from assessment year 2022-23 to assessment year 2026-27 vide URN No. AACTA7870QE20219. Further, the assessee trust has also been granted provisional approval under clause (iv) of first proviso to sub-section (5) of section 80G of the Act on 23.3.2022 w.e.f. 23.3.2022 to assessment year 2024-25 vide URN No. AACTA7870QF20225. The assessee trust thereafter applied for final approval on 13.8.2024 in form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Act.
7.1 On receipt of application in form 10AB dated 13.8.2024 for approval u/s 80G (5) of the Act, the assessee was granted opportunity vide notice dated 30.11.2024. The ld. CIT(Exemption) rejected the approval u/s 80G of the Act mainly for the reason that Acharya Sri Tulsi Mahapragya Seva Kendra Charitable Trust, Bangalore Page 12 of 16 the set of people are found be in association and contributing amounts to the trust/fund and operating the activities. Hence, the ld. CIT(Exemption) was of the opinion that assessee is in the nature of AOP and no into charity for general public and not eligible for charity. Further, ld. CIT(Exemption) observed that the assessee failed to furnish the details of building and the nature of activities carried out in the building. Further, ld. CIT(Exemption) concluded that even activities carried by the trust are not charitable in nature and accordingly rejected the application in form No.10AB dated 13.8.2024 filed for approval u/s 80G of the Act.
Aggrieved by the order of ld. CIT(Exemption) dated 25.2.2025, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 226 pages containing therein various documents/records/certificates/Notices /submission/application/deeds/financials/returns/bank statement /FD Details, M. Tax Receipts etc in support of its case.
Before us, the ld. A.R. of the assessee vehemently submitted that ld. CIT(Exemption) has granted only one opportunity of hearing vide notice dated 30.11.2024 and without issuing final show cause notice to the assessee trust had dismissed the appeal of the assessee, which is a gross violation of principles of natural justice. Further, the ld. A.R. of the assessee submitted that the assessee satisfied all the conditions of section 80G(5) of the Act and the assessee is also registered as a charitable trust with objectives like education, health and welfare & therefore the ld. CIT(E) grossly erred in rejecting the approval u/s 80G(5) of the Act.
Ld. D.R. on the other hand relied on the order of ld. CIT(Exemption).
We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the assessee has been granted registration u/s 12AB of the Act on 17.3.2022 effective from assessment year 2022-23 to 2026-27. It is also an undisputed fact that provisional approval u/s 80G(5) of the Act was also granted effective from 23.3.2022 to assessment year 2024-25. We are of the considered opinion that for the purpose of granting final approval , the relevant section is sub-section (5) of section 80G of the Act. The ld. Commissioner(Exemptions) after receiving the application for granting approval u/s 80G of the Act shall call for such document or information and make such enquiry as he/she thinks necessary in order to satisfy himself/herself about the genuineness of the activity of such institution or fund and the fulfillment of all the conditions laid down in clause (i) to (v) as follows:
(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfills the following conditions, namely:-
(i)where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 [* * *] [ Certain words omitted by Act 21 of 1998, Section 29 (w.e.f. 1.4.1999).] [* * *] [ Certain words omitted by Act 20 of 2002, Section 30 (w.e.f. 1.4.2003).] [or clause (23-AA) or clause (23-C)] [ Substituted by Act 11 of 1987, Section 35, for " or clause (23-C)" (w.e.f. 1.4.1988).] of section 10: [Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if-
(a)the institution or fund maintains separate books of account in respect of such business;
(b)the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and Acharya Sri Tulsi Mahapragya Seva Kendra Charitable Trust, Bangalore Page 14 of 16 (c)the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business; (ii)the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; (iii)the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv)the institution or fund maintains regular accounts of its receipts and expenditure; ][*] [ The word " and" omitted by Act 32 of 1994, Section 24 (w.e.f. 1.4.1994).] (v)[ the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, ] [Inserted by Act 11 of 1983, Section 39 (w.e.f. 1.4.1984).][* * *] [ Certain words omitted by Act 20 of 2002, Section 30 (w.e.f. 1.4.2003).][or is an institution financed wholly or in part by the Government or a local authority; ] [Inserted by Act 11 of 1983, Section 39 (w.e.f. 1.4.1984).][*] [ The word " and" omitted by Act 33 of 2009, Section 33 (w.e.f. 1.4.2009).] 11.1 In view of the above we are of the considered opinion that at the time of granting of approval u/s 80G of the Act, the authority has to satisfy herself/himself that the chartable institution is established in India for charitable purposes and the activities of the assessee trust are genuine and the assessee trust also fulfilled all the conditions as mentioned above. Further, we are also of the opinion that during the course of the proceedings granting the approval u/s 80G(5) of the Act, the ld. CIT(E) should not step into the shoes of the AO & starts assessing the Income of the Assessee. On going through the order of the ld. CIT(E) we take a note of the fact that we take a note of the fact that ld. CIT (Exemption) has granted only one opportunity i.e. notice dated 30.11.2024 requiring Acharya Sri Tulsi Mahapragya Seva Kendra Charitable Trust, Bangalore Page 15 of 16 the assessee to appear either in person or through an authorized representative along with the documents and details. Further, we also take a note of the fact that ld. CIT (Exemption) failed to provide a final opportunity of being heard by way of issuing show cause notice before rejecting the application, which in our opinion is a gross violation of principles of natural justice. 11.2 Before us, the ld. A.R. of the assessee filed additional evidences by attaching copy of trust deed, certificate of registration granted u/s 12AB of the Act, copy of the price list for Naturopathy services provided at Chetna Arogyam, copy of credentials of Dr. Santosh Ramji along with an affidavit. We are of the considered opinion that all these documents/evidences were filed for the first time before the Tribunal and the ld. CIT(Exemptions) had no occasion to examine these additional evidences while passing order of rejection of approval u/s 80G of the Act. Further, before us, the ld. A.R. of the assessee submitted that one more opportunity may be granted to the assessee trust to represent its case before the ld. CIT (Exemptions) for fresh consideration. This being so, in the interest of justice and fair play as requested by ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT(Exemptions) to decide afresh in accordance with law. Needless to say a reasonable opportunity of being heard must be granted to the assessee. At the same time, we also direct the assessee to produce/submit all the necessary details/documents/records/financials/reports in support of its claim. It is ordered accordingly.